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The Pound to Australian Dollar exchange rates drifted lower on Tuesday afternoon, this comes as Theresa May went on a last minute charm offensive in Paris and Berlin in attempt to persuade Emmanuel Macron and Angel Merkel to back her request for a short Brexit extension. EU leaders will decide on Wednesday whether to grant Theresa May another Brexit delay or leave the UK to face a no- deal Brexit on Friday, an outcome that will unnerve most GBP investors.

Demand for the Pound is unlikely to see any significant improvement in the near term, with investors wary ahead of Friday’s Brexit deadline.Unless Theresa May agrees another deadline extension with EU leaders the GBP/AUD exchange rate looks set to remain biased to the downside this week.If a sense of clarity over the UK’s future relationship with the EU starts to emerge, though, the Pound could recover some of its recently lost ground.On the other hand, if May fails to secure a further extension of the current deadline GBP exchange rates may come under further pressure as the risk of a no-deal Brexit intensifies.

AUD exchange rates could find fresh encouragement on the back of February’s Australian home loans and investment lending figures, meanwhile.Forecasts point towards home loans bouncing back from the previous month’s -1.2% contraction, delivering modest growth of 0.5% on the month.While investment lending is expected to remain within negative territory any improvement on January’s contraction may give the Australian Dollar a modest boost against its rivals.However, if Australian lending shows signs of weakening as consumers and businesses rein in their borrowing this could offer the GBP/AUD exchange rate some support.

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